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Investors Lose $11.7 Million In Risky Hedge Fund Through Lincoln Financial

According to a FINRA Letter of Acceptance, Waiver and Consent ("AWC"), between about October 2008 and April 2009, registered representatives in two of Lincoln Financial Advisors Corporation (“LFA”) branch offices allegedly recommended that customers invest in a hedge fund offered as a sub-account to a private placement variable annuity (the ”PPVA”). The Hedge Fund engaged in a complex options trading strategy, including trading uncovered options. LFA approved the PPVA and the Hedge Fund, after it was added as a sub-account by the PPVA sponsor, for investment by the LFA’s customers. According to the AWC, based on recommendations of the Firm’s registered representatives, 25 of the Firm’s customers invested a total of approximately $11.7 million in the Hedge Fund. In 2010, the Hedge Fund was shut down. Although the Hedge Fund allegedly engaged in a complicated options trading strategy that differed significantly from traditional investments and even other alternative investments, LFA also allegedly failed to provide adequate training or guidance to [...]

By |September 24th, 2015|FINRA, Press Releases & News|
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Two Charged In Alabama Securities Fraud Case

Bruce Alexander Gwyn of Metairie, Lousiana and James Anthony Ghio of Fairhope, Alabama were arrested on charges of fraud and illegal sales, the Alabama Securities Commission announced. The indictment alleges that they offered or sold securities described as limited partnership interests in Level III Trading Partners LP to an Alabama resident. The indictment further accuses that Gwyn used the victim's cash to pay off other investors, failed to use the money as he claimed he would, or made unauthorized investments. Gywn then lied about his use of the money to the victim. Gwyn is additionally alleged to have lied to investors, telling them that they would be provided with yearly financial statements and monthly progress reports. The duo was indicted by a Baldwin Count grand jury in August. Gwyn was charged with one count of sale of unregistered securities, one count of sale of securities by an unregistered investment adviser, and three counts of fraud in connection with the sales [...]

By |September 23rd, 2015|Fraud, Press Releases & News|
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FINRA Sanctions Ten Former Global Arena Representatives

During a 2014 onsite exam, FINRA found numerous securities violations at Global Arena Capital Corp., including misleading sales pitches, customer account churning, as well as other business misconduct. The regulatory authority has banned seven former registered representatives from the industry, suspended an eighth, and barred two former branch managers from serving in a principal capacity. FINRA's sanctions are part of the agency's continuing effort to track groups of brokers that move from one risky firm to another. Seven of the ten people sanctioned had switched from HFP Capital Markets LLC, a firm which FINRA later expelled, to Global Arena Capital Corp., which opened a branch in October 2013 to register a number of brokers who had been discharged by HFP. As HFP did, Global Arena's new branch's business model included cold-calling customers, including the elderly, to make solicited recommendations of securities. "FINRA carefully monitors broker migration particularly with respect to brokers that move in groups from an expelled or high-risk [...]

By |September 23rd, 2015|FINRA, Fraud, Press Releases & News|
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Texas Bitcoin Ponzi Scheme Operator Pleads Guilty To Securities Fraud

Trendon Shavers, a 33-year-old from McKinney, Texas who operated a Ponzi scheme using the virtual currency bitcoin, pleaded guilty to securities fraud this week. Shavers started a company, called Bitcoin Savings & Trust, in 2011 which he used to acquire bitcoins from potential investors via the web, telling them he would pay investors one percent interest on their investment every three days or seven percent a week. Rather, Shavers used the majority of the bitcoins to pay back previous investors, the defining element of a Ponzi scheme. He spent the remaining funds on a used BMW M5, a $1,000 dinner at a steakhouse in Las Vegas, and a number of casino outings. Shavers pleaded guilty in Manhattan court to one charge of securities fraud in what is being considered the first United States criminal fraud case involving bitcoin. Shavers acquired more than $750,000 bitcoins worth about $4.5 million when he ceased repaying investors and quickly shut down the company in 2012, [...]

By |September 22nd, 2015|Fraud, Press Releases & News, SEC|
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